L&T (LT IN) - Strong PAT growth aided by execution in Infra segment - CSEC Research

- L&T's consolidated revenue grew by 10% YoY to INR 239.9bn in 1QFY18 due to high growth in Infra, Hydrocarbons and E&A segment.

- In 1QFY18, Revenue from Infrastructure grew by 16% YoY to INR 105.2bn, Power segment grew by 2% YoY to INR 17.6bn, Heavy Engineering Segment de-grew by 7% YoY to INR 6.1 bn, Electrical & Automation segment grew by 21% YoY to INR 11.3bn, Hydrocarbon segment grew by 19% YoY to INR 25.3bn, IT & Technology services segment grew by 8% YoY to INR 25.4bn, Developmental projects segment de-grew by 28% YoY to INR 8.3bn and other segment de-grew by 1% YoY to INR 16.1 bn.

- Overall order book grew by 2% to stand at INR 2.6tn. Order inflows declined 11% YoY over high base. However, orders inflow in the infrastructure segment grew sharply 27% YoY.

Valuation: Margin expansion and strong order book growth are the key positives for the company. Armed with a strong order book, focus now shifts to execution. Currently, the stock is trading at a P/E of 20.8x FY19E EPS. Bloomberg consensus has a target price of INR 1,295 based on P/E multiple of 23x FY2019 consensus estimates with an Outperformer rating.
Risks: Pressure on margins, Slowdown of orders from Middle East.

Shares of LARSEN & TOUBRO LTD. was last trading in BSE at Rs.1176.7 as compared to the previous close of Rs. 1174.35. The total number of shares traded during the day was 259378 in over 3442 trades.

The stock hit an intraday high of Rs. 1181.65 and intraday low of 1169.95. The net turnover during the day was Rs. 304117130.